In transportation planning, induced demand, also called "induced traffic" or consumption of road capacity, has become important in the debate over the expansion of transportation systems, and is often used as an argument against increasing roadway traffic capacity as a cure for congestion. Induced traffic may be a contributing factor to urban sprawl and affordable housing. City planner Jeff Speck has called induced demand "the great intellectual black hole in city planning, the one professional certainty that every thoughtful person seems to acknowledge, yet almost no one is willing to act upon."
The inverse effect, known as reduced demand, is also observed.
Economics
"Induced demand" and other terms were given economic definitions in a 1999 paper by Lee, Klein, and Camus. In the paper, "induced traffic" is defined as a change in traffic by movement along the short-run demand curve. This would include new trips made by existing residents, taken because driving on the road is now faster. Likewise, "induced demand" is defined as a change in traffic by movement along the long-run demand curve. This would include all trips made by new residents who moved to take advantage of the wider road.
In transportation systems Definitions According to CityLab:
Induced demand is a catch-all term used for a variety of interconnected effects that cause new roads to quickly fill to capacity. In rapidly growing areas where roads were not designed for the current population, there may be significant latent demand for new road capacity, which causes a flood of new drivers to immediately take to the freeway once the new lanes are open, quickly congesting them again. But these individuals were presumably already living nearby; how did they get around before the expansion? They may have taken alternative modes of transport, travelled at off-peak hours, or not made those trips at all. That’s why latent demand can be difficult to disentangle from generated demand—the new traffic that is a direct result of the new capacity. (Some researchers try to isolate generated demand as the sole effect of induced demand.)Schneider, Benjamin (September 6, 2018) "CityLab University: Induced Demand" CityLab
The technical distinction between the two terms, which are often used interchangeably, is that latent demand is travel that cannot be realised because of constraints. It is thus "pent-up". Induced demand is demand that has been realised, or "generated", by improvements made to transportation infrastructure. Thus, induced demand generates the traffic that had been "pent-up" as latent demand.Mokhtarian, Patricia L. (ndg) "Understanding the Concept of Latent Demand in Traffic" State of California Department of TransportationRodrigue, Jean-Paul (2016) "Transportation as a Derived Demand" The Geography of Transport Systems
History Latent demand has been recognised by road traffic professionals for many decades, and was initially referred to as "traffic generation". In the simplest terms, latent demand is demand that exists, but, for any number of reasons, most having to do with human psychology, is suppressed by the inability of the system to handle it. Once additional capacity is added to the network, the demand that had been latent materialises as actual usage.Vanderbilt, Tom (2008) Traffic: Why We Drive the Way We Do (and What It Says About Us) New York; Knopf. pp.154-156.
The effect was recognised as early as 1930, when an executive of a St. Louis, Missouri, electric railway company told the Transportation Survey Commission that widening streets simply produces more traffic, and heavier congestion.Report of the Transportation Survey Commission of the City of St. Louis (1930), p.109, cited in Fogelson, Robert M. (2001) Downtown: Its Rise and Fall, 1880–1950 New Haven, Connecticut: Yale University Press. p.66. In New York, it was clearly seen in the highway-building program of Robert Moses, the "master builder" of the New York City area. As described by Moses's biographer, Robert Caro, in The Power Broker: During the last two or three years before [the entrance of the United States into World War II], a few planners had ... begun to understand that, without a balanced system [of transportation], roads would not only not alleviate transportation congestion but would aggravate it. Watching Moses open the Triborough Bridge to ease congestion on the Queensborough Bridge, open the Bronx-Whitestone Bridge to ease congestion on the Triborough Bridge and then watching traffic counts on all three bridges mount until all three were as congested as one had been before, planners could hardly avoid the conclusion that "traffic generation" was no longer a theory but a proven fact: the more highways were built to alleviate congestion, the more automobiles would pour into them and congest them and thus force the building of more highways – which would generate more traffic and become congested in their turn in an ever-widening spiral that contained far-reaching implications for the future of New York and of all urban areas. The same effect had been seen earlier with the new parkways that Moses had built on Long Island in the 1930s and 40s, where ... every time a new parkway was built, it quickly became jammed with traffic, but the load on the old parkways was not significantly relieved. Similarly, the building of the Brooklyn–Battery Tunnel failed to ease congestion on the Queens-Midtown Tunnel and the three East River bridges, as Moses had expected it to. By 1942, Moses could no longer ignore the reality that his roads were not alleviating congestion in the way he expected them to, but his answer to the problem was not to invest in mass transit, it was to build even more roads, in a vast program which would expand or create of roads, including additional bridges, such as the Throgs Neck Bridge and the Verrazzano–Narrows Bridge.
J. J. Leeming, a British road-traffic engineer and county surveyor between 1924 and 1964, described the phenomenon in his 1969 book, Road Accidents: Prevent or Punish?: Motorways and bypasses generate traffic, that is, produce extra traffic, partly by inducing people to travel who would not otherwise have done so by making the new route more convenient than the old, partly by people who go out of their direct route to enjoy the greater convenience of the new road, and partly by people who use the towns bypassed because they are more convenient for shopping and visits when through traffic has been removed. Leeming went on to give an example of the observed effect following the opening of the Doncaster Bypass section of the A1(M) in 1961. By 1998, Donald Chen quoted the British Transport Minister as saying "The fact of the matter is that we cannot tackle our traffic problem by building more roads."Chen, Donald D. T. (March 1998) "If You Build It, They Will Come ... Why We Can't Build Ourselves Out of Congestion" Surface Transportation Policy Project Progress; quoted in
In Southern California, a study by the Southern California Association of Governments in 1989 concluded that steps taken to alleviate traffic congestion, such as adding lanes or turning freeways into double-decked roads, would have nothing but a cosmetic effect on the problem. Also, the University of California at Berkeley published a study of traffic in 30 California counties between 1973 and 1990 which showed that every 10 percent increase in roadway capacity, traffic increased by 9 percent within four years time. A 2004 meta-analysis, which took in dozens of previously published studies, confirmed this. It found that: ... on average, a 10 percent increase in lane miles induces an immediate 4 percent increase in vehicle miles travelled, which climbs to 10 percent – the entire new capacity – in a few years.Salzman, Randy (December 19, 2010) "Build More Highways, Get More Traffic" The Daily Progress, quoted in An aphorism among some traffic engineers is "Trying to cure traffic congestion by adding more capacity is like trying to cure obesity by loosening your belt."
According to city planner Jeff Speck, the "seminal" text on induced demand is the 1993 book The Elephant in the Bedroom: Automobile Dependence and Denial, written by Stanley I. Hart and Alvin L. Spivak.
Price of road travel A journey on a road can be considered as having an associated cost or price (the generalised cost, g) which includes the out-of-pocket cost (e.g. fuel costs and tolls) and the opportunity cost of the time spent travelling, which is usually calculated as the product of travel time and the value of travellers' time. These cost determinants change often, and all have variable effects on demand for transport, which tends to be dependent on the reason(s) as well as method of travel.
When road capacity is increased, initially there is more road space per vehicle travelling than there was before, so congestion is reduced, and therefore the time spent travelling is reduced – reducing the generalised cost of every journey (by affecting the second "cost" mentioned in the previous paragraph). In fact, this is one of the key justifications for construction of new road capacity (the reduction in journey times).
A change in the cost (or price) of travel results in a change in the quantity consumed. Factors such as petrol prices, as well as fuel costs, are the most common variables that influence the quantity demanded for transport. This can be explained using the simple supply and demand theory, illustrated in this figure.
Elasticity of transport demand
The economic concept of elasticity measures the change in quantity demanded relative to a change in another variable, most commonly price. For roads or highways, the supply relates to capacity and the quantity consumed refers to vehicle miles traveled. The size of the increase in quantity consumed depends on the elasticity of demand.
The elasticity of demand for transport differs significantly depending on the reason people are choosing to travel initially. The clearest example of inelastic demand in this area is commuting, as studies indicate that most people are going to commute to work, regardless of fluctuations in variables such as petrol prices, as it is a required activity to generate income. This exemplifies the fact that activities that yield a high economic benefit, in this case, financial gain in the form of income, tend to be inelastic. In contrast, travel for recreational or social reasons has a low tolerance for price increases, and as such the demand for recreational travel when prices spike sees a sharp decline.
A review of transport research suggests that the elasticity of traffic demand with respect to travel time is around −0.5 in the short term and −1.0 in the long term. This indicates that a 1.0% saving in travel time will generate an additional 0.5% increase in traffic within the first year. In the longer term, a 1.0% saving in travel time will result in a 1.0% increase in traffic volume.
Sources of induced traffic In the short term, increased travel on new road space can come from one of two sources: diverted travel and induced traffic. Diverted travel occurs when people divert their trip from another road (change in route) or reschedule their travel to avoid peak period congestion – but if road capacity is expanded, peak congestion is lower and they can travel at the time they prefer.
Induced traffic occurs when new automobile trips are generated. This can occur when people choose to travel by car instead of public transport, or decide to travel when they otherwise would not have.